una provocazione:
Is it possible a GM (
GM) bankruptcy - contrary to popular belief -
would actually boost sales?
The Way We Live Now
Totaled?
By
MATT BAI
Published: March 25, 2009
Of all the various forms of corporate subsidy that the American taxpayer is now being asked to shoulder (bailouts for swaggering investment bankers and insurers, lifelines for overextended homeowners and the mortgage lenders who took advantage of them), perhaps none evoke such complicated emotions in Washington as the comparatively modest plea of
General Motors. This is not simply because of its size, but also because
G.M. is bound up with our collective identity, both national and personal. No congressman looks back wistfully at the first batch of securitized mortgages he bought with his hard-earned savings during his teenage years or to losing his virginity in the back of his father’s trading floor. Probably no senator thinks back nostalgically to the beloved uncle who proudly broke his back every day for 40 years working in the reinsurance business. To a lot of politicians and White House aides, G.M. isn’t simply another failing company looking for a handout; it’s as much a symbol of middle-class aspiration as the tract house and the
Disneyland vacation.
Of course, this deep familiarity we have with G.M. and its cars can cut the other way too. Recently, as politicians back in Washington were discussing a first round of public loans for the automakers, I rented a Pontiac in Southern California. I soon found myself trapped like Houdini in the awkwardly tilted cockpit, peering around blind spots the size of billboards. By the time I reached my destination, I was marveling at the gall of a company that would make such a thing and then ask for my largess when it turned out to be unprofitable.
Such visceral reactions to the fate of G.M. may surface again in Congress this week as the government decides whether to extend G.M. another $16 billion in federal loans or to nudge the company into some kind of orderly bankruptcy. On one side of the debate are those elected leaders, primarily Republicans, who preach the primacy of markets, especially representatives who hail from the rural states where G.M.’s foreign competitors now provide thousands of highly coveted, nonunion jobs. This group contends that G.M. will never be able to right itself unless it can renegotiate its untenable agreements with workers, debtors and dealers. On the other side are mostly Democrats who see themselves as champions of the workingman, led by politicians whose industrial states, Michigan chief among them, stand to lose thousands of their remaining union jobs if G.M. goes under. They argue that the collapse of G.M. would spread like a tsunami through the rest of the already-imperiled industrial economy.
Until recently, at least, General Motors itself has resisted bankruptcy with the same single-minded desperation with which most able-bodied men resist driving a minivan. This is not only because bankruptcy would wipe out G.M.’s shareholders — some of whom, coincidentally, are the executives who run the company — but also because G.M. believes that going under would mortally wound its brand. The thinking here is that no one would risk buying a car, not to mention a service warranty, from a company attached to the words “Chapter 11.”
This argument underscores the deeper problem afflicting G.M. over a period of decades now — not simply soaring labor costs or global competition but also an inability to grasp underlying changes in American culture. There probably was a time when a well-publicized bankruptcy would, in fact, have destroyed the viability of a brand. But in the 20 years since Silicon Valley start-ups began transforming the workplace, younger Americans — in other words, those who now make up the heart of the consumer market — have largely dispensed with the mythology of the infallible institution. Transparency and reinvention, rather than stability and regality, are the more valued assets in an economy where entrepreneurs expect to stumble more often than they succeed and where employees expect to have to change jobs (if not careers) multiple times. In the fastest-growing quarters of the economy, admitting your failures and remaking yourself is the new American work ethic.
You need only look at the politics of the digital age to see how powerful this narrative can be. Unlike their predecessors, who went to great effort to hide character flaws from the voters, our last two presidents admitted stunning personal failings — one effectively owned up to a sex addiction, the other to an indulgence for drinking — and found voters more sympathetic rather than less. (In
George W. Bush’s case, it was the opposite inclination, his refusal to admit to mistakes in Iraq and to remake policy accordingly, that ultimately led to the undoing of his presidency.)
Al Gore, forced to declare a kind of political bankruptcy after the 2000 election, reinvented himself as an environmental crusader and walked off with the
Nobel Prize.
No doubt there are practical hurdles to a G.M. bankruptcy; surely the government would have to help protect workers and minimize economic fallout. But it might just be that modern car-buyers would be more willing to give a reconstituted G.M. a hearing. They might have more faith, not less, in a warranty or service contract issued by a restructured, government-backed G.M. than they do now, with the fate of the company constantly in doubt. In fact, the process of publicly admitting failure and rebooting itself for a new century might be the only way for G.M. to redeem itself in the eyes of a generation of consumers who came of age in the back seats of Hondas and Nissans.
If, instead, politicians intervene once again to spare the company they remember as a symbol of American greatness, they may yet succeed in cementing G.M. as a symbol of something else: the culture of intransigent institutions that is, for most Americans, receding in the rearview mirror.
Matt Bai, who covers politics for the magazine, is the author of “The Argument: Inside the Battle to Remake Democratic Politics.”
